Paid Tax Preparers Need IRS Identification Number — January 2012, reviewed January 2013

For the 2011 tax preparation season the IRS initiated changes to strengthen the regulation of commercial tax preparers.  Now they are required to register with the IRS to be permitted to file tax returns.  With this registration they receive a Preparer Tax Identification Number (PTIN).  This change also includes a requirement to pass an IRS examination on tax law and regulations, which they will need to redo every three years.  In the future, paid preparers will also need to show they have met continuing education requirements in tax practice.

 Minnesota does not require tax preparers to be licensed.  However, many preparers are licensed, certified, and belong to professional organizations that require a certain level of education. 

Free tax assistance programs are not affected by the registration. Volunteers who provide VITA and Tax Counseling for the Elderly already were required to pass an annual certification exam.  The volunteer site will provide their identification number on tax returns they file for others.

When choosing a tax preparer ask these questions (www.irs.gov/uac/Ten-Tips-to-Help-You-Choose-a-Tax-Preparer) :

Will the tax preparer be available later in case the IRS has questions?

What is the tax preparer’s reputation?  Check them out with the Better Business Bureau or others in the community.  Ask about their formal tax training, licenses and accreditation.

Ask about fees to have your taxes prepared before scheduling an appointment.  Be sure to ask if there are any fees for additional forms for claiming various credits.

Avoid a tax preparer who suggest you lie or make up information.  You will be responsible for errors, NOT the preparer.

My final caution is never sign a blank tax form – even for your preparer.  Remember you are responsible for your tax return – choose your tax preparer carefully!